Retail figures boost sentiment
Dow Jones enjoys record one-day rebound after Christmas Eve rout
A sharp rise in Christmas shopping helped underpin a rebound in US stocks after the worst Christmas Eve trading in Wall Street history.
Investors were cheered on Wednesday by an upbeat retail report and the Trump administration’s efforts to shore up investor confidence. Asia followed Wall Street’s rise with Japan’s Nikkei pulling out of bear market territory and rising 3.8%.
Steep falls on the Dow Jones and S&P 500 on Monday prompted fears of a new year bear market amid a mix of worrying factors headed by concerns over the US economy. The S&P 500 came within 2 points of being down 20% from its late-September closing high, the threshold commonly used to define a bear market.
As Wall St traders returned to their desks on Wednesday they were relieved by upbeat retail figures showing sales during the holiday shopping season rose 5.1% to more than $850 billion in 2018, the strongest in six years.
The Dow Jones Industrial Average rose 1,086.25 points, or 4.98% the S&P 500 gained 116.6 points, or 4.96% and the Nasdaq Composite added 361.44 points, or 5.84%.
US crude rallied almost 8.7% while Brent jumped more than 8.8% as it recovered from steep losses that pushed crude benchmarks to lows not seen since last year. However, both were later trading about half a per cent lower with US crude at $45.99 a barrel and Brent at $54.24.
Benchmarks for both oil and stocks hit their lowest in more than a year on Monday as a swath of concerns rattled investors, including a government shutdown, President Trump’s unhappiness over the Federal Reserve’s interest rate policy and ongoing unease over US-China trade relations.
The previous record point gain for the Dow was 936.42 on 13 October 2008 when markets gyrated almost daily by developments in the financial crisis. Over the two sessions following that gain, the Dow dropped more than 800 points.
Among those providing a brighter outlook on Wednesday were retailers such as Amazon, which saw its price increase by 5% after the company said that it had seen a record holiday season.
Energy and IT companies also saw increases.
Markets in Britain, Germany and France were closed on Wednesday.